Inside information: Nokia lowers net sales and narrows operating margin outlook for 2023

Nokia Corporation
Inside information
14 July 2023 at 08:30 EEST

Inside information: Nokia lowers net sales and narrows operating margin outlook for 2023

• Nokia lowers net sales outlook to EUR 23.2 billion to 24.6 billion from EUR 24.6 billion to EUR 26.2 billion
• Narrows comparable operating margin range to 11.5% to 13% from 11.5% to 14%
• Reports preliminary Q2 financial results of approximately EUR 5.7 billion net sales and 11% comparable operating margin
  

Espoo, Finland – Nokia is today providing an update to its financial guidance for full year 2023. Nokia is lowering its full year net sales outlook to a range of EUR 23.2 billion to EUR 24.6 billion (previously EUR 24.6 billion to 26.2 billion) and narrowing its comparable operating margin range outlook to 11.5% to 13% (previously 11.5% to 14%). The changes are related to Nokia’s Network Infrastructure and Mobile Networks business groups.

The weaker demand outlook in the second half is due to both the macro-economic environment and customers’ inventory digestion. Customer spending plans are increasingly impacted by high inflation and rising interest rates along with some projects now slipping to 2024 – notably in North America. There is also inventory normalization happening at customers after the supply chain challenges of the past two years.

Update to Nokia’s financial outlook for 2023

	Updated	Previous (as of Q1 results)
Net sales1	EUR 23.2 billion to EUR 24.6 billion (-4% to +2% constant currency growth)	EUR 24.6 billion to EUR 26.2 billion (2% to 8% constant currency growth)
Comparable operating margin	11.5% to 13%	11.5% to 14%
Free cash flow conversion from comparable operating profit	20% to 50%	20% to 50%

¹ Assuming the rate 1 EUR = 1.09 USD as of 30 June 2023 continues for the remainder of 2023 along with actual H1 foreign exchange rates (adjusted from prior 1.09 USD rate as of 31 March 2023).

In the second quarter, based on its preliminary financials, Nokia expects to report net sales of approximately EUR 5.7 billion, flat year-on-year on a constant currency basis with a comparable operating margin of approximately 11%. Nokia’s operating profit in Q2 benefitted from approximately EUR 80 million related to catch-up net sales in Nokia Technologies.

Across the group Nokia has been proactively managing costs to protect profitability. As it progresses through this period of uncertainty Nokia will continue to take measures to ensure it remains on track towards its long-term targets of growing faster than the market and delivering a comparable operating margin of at least 14%.

Nokia will release its second quarter and half year 2023 financial results on Thursday 20 July 2023.

Nokia will conduct a conference call with analysts and investors to discuss its second quarter performance and business outlook on 20 July 2023 at 11:30am EEST / 9:30am BST / 4:30am US EST.

About Nokia
At Nokia, we create technology that helps the world act together.

As a B2B technology innovation leader, we are pioneering networks that sense, think and act by leveraging our work across mobile, fixed and cloud networks. In addition, we create value with intellectual property and long-term research, led by the award-winning Nokia Bell Labs.

Service providers, enterprises and partners worldwide trust Nokia to deliver secure, reliable and sustainable networks today – and work with us to create the digital services and applications of the future.

Inquiries:

Nokia Communications
Phone: +358 10 448 4900
Email: press.services@nokia.com
Kaisa Antikainen, Communications Manager

Nokia
Investor Relations
Phone: +358 40 803 4080
Email: investor.relations@nokia.com

Forward-lookingstatements

Certain statementshereinthat are not historicalfacts are forward-lookingstatements. Theseforward-lookingstatementsreflectNokia'scurrent expectations and views of future developments and includestatementsregarding: A) expectations, plans, benefits or outlookrelated to ourstrategies, productlaunches, growth management, sustainability and other ESG targets, operational key performance indicators and decisions on market exits; B) expectations, plans or benefitsrelated to future performance of our businesses (including the expected impact, timing and duration of potential global pandemics and the generalmacroeconomic conditions on our businesses, oursupplychain and ourcustomers’ businesses) and any future dividends and other distributions of profit; C) expectations and targetsregardingfinancial performance and results of operations, includingmarketshare, prices, net sales, income, margins, cash flows, the timing of receivables, operating expenses, provisions, impairments, taxes, currency exchange rates, hedging, investmentfunds, inflation, productcostreductions, competitiveness, revenue generation in anyspecificregion, and licensingincome and payments; D) ability to execute, expectations, plans or benefitsrelated to changes in organizational structure and operating model; E) impact on revenue with respect to litigation/renewal discussions and F) anystatementspreceded by or including "continue", “believe”, “commit”, “estimate”, “expect”, “aim”, “influence”, "will” or similar expressions. Theseforward-lookingstatements are subject to a number of risks and uncertainties, many of which are beyondour control, whichcould cause ouractualresults to differmateriallyfromsuchstatements. Thesestatements are based on management’s best assumptions and beliefs in light of the information currentlyavailable to them. Theseforward-lookingstatements are onlypredictionsbaseduponourcurrent expectations and views of future events and developments and are subject to risks and uncertaintiesthat are difficult to predictbecausethey relate to events and depend on circumstancesthatwilloccur in the future. Factors, includingrisks and uncertaintiesthatcould cause thesedifferences, includethoserisks and uncertaintiesspecified inour 2022 annual report on Form 20-F published on 2 March 2023 under Operating and financialreview and prospects-Risk factors.

To view this piece of content from www.globenewswire.com, please give your consent at the top of this page.
To view this piece of content from ml-eu.globenewswire.com, please give your consent at the top of this page.